State Bank today reported a group net of 1,840.43 crore for September quarter, boosted by the gains from the public offer in its life insurance arm and a very low base when it had a paltry Rs 20.70 crore of profit.

Since the nation's largest lender had merged its five associate banks and Bharatiya Mahila Bank from April this year, the numbers are not comparable.

However, on consolidated basis, the merged entity would have made a loss of Rs 557 crore in the same period last fiscal, as the associate banks had incurred huge losses due to higher slippages after the RBI's asset quality review forcing them to make additional provisions.

In absolute terms, gross bad loans rose to Rs 1,86,114.60 crore or 9.83 per cent from Rs 1,05,782.96 crore or 7.1 per cent, while net NPAs rose to Rs 97,896.29 crore or 5.43 per cent from Rs 60,013.45 crore or 4.19 per cent.

However, on a sequential basis, gross NPAs and net NPAs improved a bit to 9.97 per cent and 5.97 per cent, respectively. Fresh slippages stood at Rs 9,026 crore in the reporting quarter.

Commenting on the numbers, which was lapped up by the market with an over 6 per cent rally, chairman Rajnish Kumar said, "this is a very satisfying quarter as far as our performance is concerned. If you look at our operating income, the story is very strong."

"Our retail franchise is giving us tremendous support in these times and digital offering also remains very strong," he told reporters on a concall on his maiden earnings presser after assuming office last month.

During the reporting quarter, SBI sold its shares in life insurance business SBI Life for Rs 5,436 crore.

Domestic net interest margin declined in the quarter to 2.59 per cent from 2.98 per cent a year ago. Net interest income rose a tad to Rs 18,586 crore from 18,119 crore.

On asset quality, the chairman said "we are capable of handling NPAs and we'll emerge stronger. Just wait for a few more quarters and you will see improvements".

The watch list has come down from Rs 24,000 crore to Rs 21,000 crore in the quarter and fresh slippages stood at Rs 9,026 crore.

The slippage ratio declined to 1.85 per cent from 5.38 per cent in the first quarter.

The bank parked a part of the IPO proceeds from SBI Life for accelerated provisioning taking its provision coverage ratio to 65.10 per cent.

"The idea for increased provisions is to enhance our loss absorption capacity. We intend to come closer to the expected loss as far as our NPAs are concerned. This time we had some cushion available from SBI Life stake sale (Rs 5,436 crore). So, we increased our provision coverage ratio to a little over 65 per cent," Kumar said.

In the first list of the stressed accounts which RBI has asked banks to refer to the NCLT, the bank has exposure to 12 accounts, while in the second list of 28 accounts it has exposure to 27.

Kumar said almost the entire second list of the stressed accounts will go to NCLT.

The bank has already made provisions of over 50 for accounts it has exposure both the list per cent as per the RBI requirements.

In the second list of the NCLT accounts, although the bank is trying to resolve some of them outside the NCLT, it has provided provision of Rs 2,041 crore.

"In the second list, if you go by the RBI guidelines, we have provided for almost 75 per cent of what would have been required if all the accounts in the second list are taken to NCLT," said managing director for corporate and global banking B Sriram.

The lender has also made an accelerated provision of Rs 2,380 crore on certain stressed standard assets which it feels may become NPA.